| Entrepreneurs Buy a Business With One Eye on | | | | that at some point in the future he would have |
| Selling It -- number ten in a series taken | | | | five percent and they would have ninety-five per |
| from:How to Evaluate and Profit from a Business | | | | cent of the ownership tax-free. This was a great |
| Opportunity - The Entrepreneur's | | | | idea.Problems arose when one or two of the |
| GuideEntrepreneurs don't do this because they | | | | children, now grown with families and adult issues |
| are in a hurry to sell the business; they do this | | | | of their own shaping their interests, looked at |
| because it's a great double check on the value of | | | | their individual holdings in this "family business" as |
| what they are thinking about buying. When you | | | | assets they would like to do something with more |
| change your perspective to selling a business | | | | in keeping with their own priorities. The father, |
| sometime in the future, you force yourself to | | | | now unable or unwilling to raise the cash to buy |
| think about whether that product or service will | | | | out those who wanted cash, was forced to sell |
| still be demand at that time. Maybe you can see it | | | | the business he envisioned would have been in the |
| even more in demand -- maybe less so. If you | | | | family for years. Had he formed a family trust |
| think it will be less in demand then you need to | | | | and made the trust the eventual owner of the |
| start thinking about how you are going to change | | | | business, then no single person could have forced |
| the business, or maybe forget about getting | | | | a decision -- the trust would have had to act as a |
| involved altogether.At the same time you are | | | | unified voice.As the buyer of a business you |
| going through this exercise you will be thinking | | | | should look at the future with realistic eyes and as |
| about who will be the likely buyer. Will it be | | | | much imagination as you can bring to the |
| someone like yourself, or will you have grown the | | | | questions you see ahead. If the future is strong |
| business so that it will be beyond the reach of an | | | | and you are capable you may very well be |
| individual, that it will be bought by a company or | | | | launching a business that someday may be a |
| by an investment group, or by a wealthy | | | | great candidate for a public offering. Don't be |
| non-owner investor. If that's the likely scenario, | | | | constrained by what is in place or by your own |
| then you should be thinking about how you will | | | | seemingly limited background.Remember -- |
| operate the business. You should give more | | | | management is cause, all else is the result.You will |
| thought to operating it as a by-the-book, | | | | find more about this topic in chapter nineteen in |
| pay-the-taxes business and not as your personal | | | | my book.The next articles I post will be dealing |
| cash cow. It takes a lot of explaining to get | | | | with making the business opportunity you buy |
| someone to buy into the fact that the business is | | | | become successful, I hope you continue to read |
| worth more than the books show because you | | | | about and profit from what I have learned in my |
| have been taking cash out and not including that | | | | thirty-year career as an entrepreneur.By Art |
| money as sales or that you really don't need all | | | | Consoli Consoli held eight corporate positions with |
| those family members listed on the payroll.Having | | | | Johnson & Johnson before starting his first |
| an idea what you might do in the future will help | | | | business. He went on to build over twenty |
| you make decisions about the entity you choose | | | | businesses from patents or ideas or from |
| to take ownership or whether you buy or lease | | | | businesses others couldn't make successful. These |
| assets, or how you structure the relationship with | | | | ranged from starting a veterinarian drug company |
| any investors or minority partners you might take | | | | to taking over a steel fabricating company to |
| in. It's always much more difficult to unwind a | | | | developing the first manufactured home |
| situation that has become a hurdle than it is to | | | | subdivision to qualify for every private and |
| set the relationship up correctly at the | | | | government assisted mortgage program in |
| beginning.Keep in mind no thoughts you come up | | | | Arizona. He also did ten workouts for lenders and |
| with or plans you might hold in your head have to | | | | owners; the last was a $30 million, 300 employee, |
| be put in place. It's just better if your actions are | | | | precision parts manufacturing plant that made |
| based on as complete a plan as you can | | | | parts for the auto industry. Consoli's unique |
| envision.For example I know a fellow who bought | | | | background and skills allow him to speak and write |
| a business and took title as a Limited Liability | | | | about how someone with limited experience can |
| Corporation (LLC). He put in all the money, gave | | | | do a self-evaluation which will let him decide which |
| himself ninety percent ownership and named | | | | business opportunity is best, how to evaluate |
| himself the Managing Member. His named each of | | | | opportunities and gain control over the one which |
| his four children as members with two and | | | | offers the greatest potential and then manage |
| one-half per cent ownership each. It was his plan | | | | that business to success. Readers of his book call |
| to gift each child a percentage of the business | | | | and write to tell him how much his book has |
| each year, to the limits of the tax gift rules, so | | | | helped their lives and improved their business. |